William J. Kelly

Rocky Mountaineers Revolt

Faced with the prospect of nearby gas drilling, Colorado rancher Janine Fitzgerald has a message for the Golden State: "Places like California could do a hell of lot more with solar energy that would not trash places like this."

The 40-year-old mother, who farms and raises draft horses with her family at the foot of the HD Mountains above the small town of Ignacio, is concerned that planned coal-bed methane development may dry up the springs that residents of the area depend on for water and that eventually flow to California along the Colorado River.

Planned drilling of tens of thousands of wells has unleashed a backlash among ranchers, farmers, and independent business people. They're challenging drilling aimed at fueling California as traditional gas fields run dry and see the new wells as a major threat to their water, air, land and way of life. Traditional gas drilling is reaching into more inhabited areas – as are new extraction methods, such as coal-bed methane.

From New Mexico to Montana, they are petitioning their government and filing lawsuits. They mutter only expletives about Vice President Dick Cheney, but heap praise upon Governor Arnold Schwarzenegger for his support of renewable power in California and his recent initiative with New Mexico governor Bill Richardson to increase use of renewable resources and foster cleaner energy in the American West.

Retired air force physicist Perry Walker, a lifelong Republican, has been studying air pollution from gas drilling operations. Perry documents a 15 percent decline in visibility due to well flaring and other energy company practices around Pinedale, Wyoming. He has petitioned the state to regulate the industry.

Lisa Bracken and her fellow residents began drinking bottled water last February when an EnCana Oil & Gas (USA) Inc. well drilled into gas-bearing sandstone allegedly contaminated Divide Creek, which eventually flows into the Colorado River near Silt, Colorado.

Residents are in the process of filing a lawsuit against EnCana over its alleged pollution of the creek when the casing on one of its wells failed. State authorities have cited the company and are seeking up to a $420,000 penalty. They say while it takes about $1 million to drill a well in Garfield County, Colorado, over its life a well will produce about $50 million worth of gas at today's prices.

Bracken and those like her are not necessarily opposed to all gas drilling, but they want to make sure the environmental impacts are fully mitigated. To do that, they believe, drillers should be required to follow best practices, and Californians and other urbanites should expect to pay high enough energy bills to cover necessary mitigation measures.

New technology makes gas production compatible with environmental protection, according to Walter Lowry, who spent 20 years drilling for gas and oil before becoming director of community and industry relations for EnCana at its Denver headquarters. For instance, directional drilling enables companies to minimize their footprint on the land while tapping gas that was uneconomical to recover 20 years ago.

"We're committed to be the industry leader," said Lowry while pointing out pads where EnCana had recently drilled multiple wells to minimize disturbance of the land in Garfield County – where 10,000 new gas wells are planned around Silt, Rifle, and other towns.

EnCana is beginning to flare raw hydrocarbon vapors from condensate brought up with natural gas in well fields rather than venting it directly into the air, said Lowry. The firm also is making a transition to less polluting engines to power drilling rigs.

In another step, EnCana is using water to fracture the sandstone formations that hold gas to promote its flow to wells, according to Lowry. This will eliminate any concerns that fracturing fluids may contaminate underground sources of drinking water, although some companies still use fluids containing diesel fuel and other toxic materials, according to the U.S. Environmental Protection Agency.

Residents maintain that even with mitigation measures, the scale of gas development will forever change the landscape of their hallowed ground and erase their tradition of independent living off the land.

"The sacrifice of a rural area to benefit an urban area is an age-old story," said Dan Randolph, oil and gas organizer for the San Juan Citizens Alliance in Durango, Colorado. "But the rural people don't necessarily think it's a fair trade."

The Patriot Ax

The risks of planned liquefied natural gas terminals are being kept secret from residents where terminals are planned because of recent federal rules issued under the U.S.A. Patriot Act. Local and state officials on both coasts and in the Gulf, who are just becoming familiar with the rules, may be kept from gaining full access to the safety studies -- as well as residents in affected areas.

To date, the Federal Energy Regulatory Commission has restricted access to more than 90,000 documents under the rules. "A considerable percentage of them are about safety and environmental compliance," said Sean Moulton, senior information policy analyst for OMB [Office of Management and Budget] Watch in Washington, who has examined the titles of the restricted items.

While the federal commission issued the rules a year ago, their effect is only now being realized by cities, states, and citizen groups as the federal regulators apply the information controls to the spate of LNG terminal proposals across the nation.

"LNG is definitely going to be the area where this policy will get its toughest test," said Moulton. LNG poses "a significant risk to the workers and the surrounding community."

From Boston to the Gulf Coast and California's golden shore, local concern is growing over the safety of LNG terminals and the security of transport ships as the energy industry proposes dozens of terminals to provide the nation an adequate supply of natural gas from overseas as domestic wells are depleted.

Last month, for instance, the California Energy Commission dropped a plan to publish a compendium of LNG safety studies for state residents and local governments to use as they consider terminal projects along the coast, said David Maul, director of natural gas and special projects for the commission. Maul's staff found that most of the studies were considered confidential for either security or proprietary reasons.

Meanwhile, the city of Long Beach, Calif. -- which has entered a tentative LNG terminal agreement with Sound Energy Solutions -- will not be able to share with the public much of the safety information it receives, according to Dominic Holzhaus, deputy city attorney.

"We get access to quite a bit of this, but we're bound to various confidentiality agreements with FERC," said Robert Kanter, director of planning for the Port of Long Beach. He said FERC's critical energy infrastructure information rules require the city to keep the information secret.

The federal commission's infrastructure rules are aimed at keeping confidential any information that may aid "enemies," according to Tamara Young Allen, a spokesperson for the agency. Parties with a need to know can file a federal request for safety studies; if granted access, they must sign a nondisclosure agreement.

BHP Billiton, one of the companies that have proposed LNG terminals in California, plans to provide the public with a general description of the results of its risk assessment, but not the whole document, according to Kathi Hann, public affairs manager for the company. Because of concerns about terrorism and trade secrets, only state and local agencies concerned with the project will be able to receive the full assessment, she said.

The federal commission claims legal authority for its strictures under the Patriot Act, though OMB Watch's Moulton said the statute does not explicitly authorize the rules at issue.

Of immediate concern is whether FERC will release in the weeks ahead a study done under contract by ABS Consultants to analyze the likely effects of a catastrophic accident on an LNG ship. FERC will have to examine the report before deciding whether it will be subject to the regulatory restrictions, said Young Allen.

"This [study] is crucial information because that defines how safe these ships are in our community," said Casi Callaway, executive director of Mobile Bay Watch, a community group that is fighting proposed LNG terminals in Alabama.

William J. Kelly is a correspondent for California Energy Circuit where a version of this article first appeared.

Coal Mountain

The celebrated ecological economist Herman Daly once said, "There is something fundamentally wrong with treating the earth as if it were a business in liquidation." In the year ahead, the Los Angeles Department of Water & Power, the nation's largest municipal utility, has the perfect opportunity to begin righting that wrong.

The question on the minds of many environmentalists and elected officials in Los Angeles is whether the department -- which contributes to smog in Southern California and environmental degradation throughout the Southwest -- will begin to treat earth's resources as precious stones to be conserved for future generations or go on treating them like cheap goods at a discount store?

If any place in the nation has the potential to make a massive shift toward renewable power it would seem to be Los Angeles, with its abundant sunshine and urgent need to clean up air pollution. Ironically, though, the department seems poised to invest in a distant coal plant. It's not alone. Across the intermountain West, energy companies are contemplating construction of some 35 new coal power plants. Other proposals dot the South and nation as a whole.

Indeed, coal shows no signs of giving up its throne as the king of fuels in the U.S. electric utility industry. Cheaper today than in 1949, coal produces 56 percent of the nation's electricity and the Department of Energy estimates that the U.S. has enough of the mineral to burn for hundreds of years to come.

Yet, even with modern day environmental controls, coal is a major source of air pollution, including toxic mercury, and produces more carbon dioxide than other fossil fuels, which scientists widely acknowledge are causing Earth to warm up. Coal, for instance, produces 89% of the carbon dioxide from U.S. electric power plants.

Despite such problems, early next year the Utah Department of Environmental Quality is expected to issue a draft permit to build a third coal-burning power plant at the state's InterMountain Power Project. The Los Angeles department has spent $2 million to support planning and permit applications for the project and soon will have to decide whether to help finance the proposed $1.75 billion project. Alternatively, it could spend the money on renewable power facilities in its own smog-clouded backyard.

That looks unlikely. A recent report from the city council's chief advisor recommends that that department embrace green power and move toward the state's 20 percent renewable portfolio standard, but only if it's not too expensive, a caveat that appears to leave the door open to more coal.

The problem chronicled by the report -- which relies on conventional accounting -- is that renewable energy costs more than fossil fuel. For instance, wind costs between 5 and 6.5 cents/kwh and solar power costs between 40 and 60 cents/kWh, even in sunny Southern California. Meanwhile, power made from coal, like rags on a department store discount rack, costs just 2 to 4 cents/kWh.

No surprise then that the department is likely to invest in coal power in the coming year and hold off much of its planned investment in renewable power until the proverbial out years.

The Intermountain Power Project -- built in the early 1980s -- already has two 950-megawatt coal-fired units and the Los Angeles department consumes about 45 percent of their combined output. The units burn 5.3 million tons of coal a year. Their operator, the Intermountain Power Agency, estimates there are about 100 million tons of recoverable coal in the vicinity of the project's current supply mines, or a 20-year supply. The project is one of three major coal-fired power plants on which the department relies.

Its upcoming decision on whether to invest in expanding the Intermountain Power Project is likely to be intertwined with the fate of another coal plant, the Mohave Generation Station in Laughlin, Nevada. Mohave -- owned jointly by Southern California Edison, the department, the Salt River Project, and Nevada Power Co. -- has operated since 1971. The federal Environmental Protection Agency is requiring the operators to reduce the plant's sulfur dioxide emissions by 85 percent by 2006 because it diminishes visibility at the Grand Canyon. It is the single biggest source of the acidic emissions in the western United States, producing about 41,000 tons of the pollutant a year.

The 273-mile slurry pipeline that supplies the plant with coal from the Black Mesa Mine is depleting the local aquifer of the Navajo and Hopi Indians and the mine itself faces eventual depletion. Given the prospect of having to internalize some of the costs of the pollution and resource depletion, instead the department and other Mohave plant owners may simply walk away and close the plant in 2005. This would cut the department's capacity by 158 megawatts, which is 10 percent of the plant's total 1,580-megawatt capacity.

Seeing the writing on the wall, the department sold half its original 20 percent interest in the Mohave plant to the Salt River Project in 2000. It has since used the $95 million in proceeds to modernize major generating stations in the Los Angeles Basin, which operate on natural gas. The move will enable the plants to make more power without exceeding air pollution limits. However, environmental groups point out that more frequent operation of the plants will increase the actual pollution emitted from the facilities at a time when air quality shows signs of deteriorating in the Los Angeles region.

Last year, the inland area downwind of the department's plants experienced its first stage one smog alert since 1998, forcing the local air district to tell residents to restrict their outdoor activities. Over the past two years, the number of days over the federal ozone standard in the Los Angeles area shot up from an all-time low of 36 in 2001 to 68 during the 2003 summer smog season.

Meanwhile, state law requires the department to develop a renewable portfolio standard plan. In response, it plans some investments in wind, solar power, and other renewable facilities. However, even with those additional facilities, its total renewable energy generation capacity will amount to only 3 percent, or 220 megawatts out of a total of 7,000 megawatts.

The department's laggard pace at developing renewable power has rankled some members of the Los Angeles City Council and state Legislature, which has buoyed the hopes of environmentalists that a breakthrough may be at hand in the next month or two. But the promise of cheap and abundant power for the nation's second biggest city and profits from wholesale power sales bode against any departmental rush to green power.

Instead, the future is likely to involve burning sizable amounts of coal that release large amounts of carbon dioxide, acidic gases, and mercury, pollutants that are changing the climate, polluting the air, gradually contaminating the world's fish supply, and damaging human health. Coal, which supplies 50 percent of the department's power, sells for less than $24/ton, down from a peak price of $52 a ton in 1979. As long as the coal is mined and burned hundreds of miles from Southern California, Angelinos will not bear the environmental costs, at least not directly.

Being able to escape those costs will likely make it irresistible for the Los Angeles City Council -- which depends upon the department to transfer 7 percent of its power sales revenues to the city's general coffers each year -- to pass up the opportunity to invest in the new coal plant, even as they give lip-service to a renewable future.

William J. Kelly is a correspondent for Energy Circuit, where a version of this story originally appeared, at www.californiaenergycircuit.net.

The Future of Cleaner Cars

Californians are poised to again set the trend in environmentally sensitive cars under the global warming bill signed earlier this week by Gov. Gray Davis.

In the 1990's, Californians readily bought and drove cars emitting just one percent of the smog-forming pollution emitted by the cars they drove in the 1970's, reaping a major reduction in unhealthful air pollution.

In the first decade of the new millennium, state motorists will become the first to drive cars that reduce emissions causing global warming.

While the Motor Vehicle Manufacturers Association has denounced the new state law and plans to challenge it in court, what many Californians do not know is that the auto companies already are selling or preparing to market vehicles that easily will meet the new standards.

Moreover, California taxpayers have helped pay for development of these new vehicles. Their federal taxes supported the Department of Energy's $1.5 billion Partnership for a New Generation of Vehicles program in the 1990's and their motor vehicle registration fees provide ongoing funding for numerous multi-million dollar a year state clean vehicle programs.

In essence, California's new global warming law only claims the rewards of what the public already has paid for: vehicles that will save motorists money on gas, emit less of the global warming gas carbon dioxide, and reduce smog-forming pollutants too.

The new cars will save Californians some $2 billion a year at the gas pump, or about $2,200 over the life of each vehicle, according to the Union of Concerned Scientists. Producing, servicing, and marketing the new models will create almost 24,000 new jobs in California by 2015, the scientific group adds.

Key to the automotive advance is a new hybrid drive-train largely developed under the government subsidy programs that combines the gasoline-powered engine and electric motor to more than double vehicle mileage. Unlike today's electric cars, however, hybrid drivers do not have to plug in and recharge their vehicles.

General Motors is poised to begin marketing new low-emitting, high mileage hybrids beginning in 2004, well ahead of the 2009 deadline set in the new California law.

"Rather then forcing everyone into a small vehicle, we can offer consumers a choice," said GM Vice Chairman Harry J. Pearce in announcing the auto giant's plan. "You want a high mileage minivan? Fine. You want an SUV with a towing capacity and better fuel economy? We could tailor the powertrain to meet that need too," Pearce said.

Across town in Detroit, Ford Motor Co. is planning to sell a 40 miles per gallon hybrid version of its popular sport utility vehicle, the Escape, at the end of 2003. "It will offer the same functionality as the base product," said Prabhakar Patil, chief engineer on the Ford project.

In Germany, DaimlerChrysler plans to begin marketing fuel cell vehicles in 2004, which ultimately could operate on pure hydrogen without burning fossil fuel.

"We have created new vehicles which consume less energy and emit less carbon dioxide from one generation to the next," says Klaus-Dieter Vohringer, a board member with DaimlerChrysler.

Toyota boasts that it already has sold more than 100,000 hybrid vehicles worldwide, including some 90,000 of the Prius, a four-door, five passenger car that gets 52 miles per gallon in the city.

Honda has begun marketing a new hybrid version of the popular Civic, after successfully launching the Insight, a hybrid two-seater.

Davis summed it up when he signed the bill: "The technology is available. It's affordable. And it's widely used in other countries."

While the Congress recently voted down a bill to require increased automotive fuel efficiency, other states may eventually follow California's lead in the fight against global warming. The Clean Air Act gives states the power to impose California vehicle emissions standards, instead of accepting weaker federal standards.

William J. Kelly served as spokesperson and communications manager for the South Coast Air Quality Management District, the air pollution control authority for the greater Los Angeles area, and as a writer and senior editor covering the environment in Washington, D.C., for BNA, Inc.


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